Dear Chuck,

My spouse recently confessed to secretly opening a credit card in our name. It is now maxed out. We are determined to pay it off together but could use some tips for the debt and rebuilding trust. 

Crippled by Credit

Dear Crippled by Credit, 

According to Julia Kagan at Investopedia, financial infidelity occurs “when couples with combined finances lie to each other about money. For example, one partner may hide significant debts in a separate account while the other partner is unaware. Another common example is when one partner makes large discretionary expenditures without discussing the matter with their partner.”

This is a breach of trust and will lead to the erosion of the very fabric of your marriage if not addressed and restored. I am encouraged by your description that your spouse has been honest and is seeking your help to eradicate the debt.  

We will talk about paying off the debt, but my encouragement is to focus on the root cause of why your spouse felt the need to hide this and work on full transparency and mutual decision-making going forward. Your marriage is more important than the money. 

Credit Card Debt Is Spiraling Out of Control 

Credit card debt has reached an all-time high. The New York Federal Reserve reports that in the latest numbers, total consumer credit debt exceeded $1.03 trillion. Before Covid-19, record levels had reached $806 billion. The economic environment is different now: people face higher interest rates, inflation, tighter lenders, and the end to stimulus checks issued by the government during the pandemic. People carrying balances with a high APR (annual percentage rate) are in trouble.

Why Such High Credit Card Debt?

• Financial illiteracy
• Lifestyle pressure influenced by social media
• Bad spending habits
• Medical bills or home/car repairs
• Job loss/under-employed
• Spending more than earned
• Inflation’s impact on housing, cars, and groceries 

Interest Rates Are Rising! 

According to The Consumer Financial Protection Bureau (CFPB), Americans were charged $130 billion in credit card interest and fees in 2022. There is also a growing trend in credit card delinquencies. Last year, 3.35% of people were at least 90 days late on their bills; now, that has increased to over 5%. Bankrate’s annual Retail Cards Study reported on October 16th that the average retail credit card APR hit a new record high of 28.93%, up from 26.72% in 2022 and 24.35% in 2021. 

These are store-issued cards which sometimes come with deferred interest promotions. If a balance is not paid in full by a certain date, interest is charged retroactively, even if minimum payments were made during the promotional period. So everyone should be leery of store offers as we approach the holiday season!

The target interest rate has been raised 11 times since March 2022. This increased payments for those who carry a balance. When minimum payments are missed, it can negatively impact one’s credit score. The average credit card balance now totals nearly $6,000. “This represents the highest average balance since the second quarter of 2008,” said Paul Siegfried, senior vice president and credit card business leader at TransUnion. 

Defeating Your Credit Card Debt

Since you are determined to pay off your debt, start by agreeing with your spouse to make this a turning point in your lives. Pray together, forgive each other, unite your hearts, and make a plan to defeat this debt! Here are the steps I suggest: 

• Make a budget, and track your spending.
• Give first, and save second—this resets your priorities and honors God. 
• Stop using credit cards, and cut discretionary spending.
• Find ways to increase your income.
• Choose a payback plan, and apply extra dollars toward debt.
  • Debt Snowball: This method grants a psychological advantage. List your debt in order of smallest to largest. Pay off the smallest first while continuing to make minimum payments on the others. Once paid off, apply that payment to the next debt, and so forth. You will gain momentum as you decrease the number of debts.
  • Debt Avalanche: This method will save you more money in the long run. List your debts in order of highest interest to lowest. Pay off the card with the highest interest rate first while continuing to make minimum payments on the others. Once paid, apply that dollar amount to the next debt, and so forth. You will gain momentum as you go.

• Set a date to be free of debt, and post that where you will see it daily.
• Ask God to grant you self-control, strength, and hope. 
• Get help now. We have trained budget coaches, online courses, guides, and worksheets.

Romans 13:8 says, “Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law.” I suggest you both memorize this and say it to one another each day. It covers the heart of the issue. 

Christian Credit Counselors is an excellent and trusted source of help for credit card debt. Contact them, and they can help you get on the road to financial freedom.

This article was originally published on The Christian Post on November 3, 2023